The Energy Department was able to unite export foe Sen. Ed Markey, D-Mass., and advocate Sen. Mark Udall, D-Colo., by devising a new approach that appears to accelerate the review process overall, even though it extends the time benefits to just a few well-heeled players.

For most of the two dozen projects still waiting for liquefied natural gas export licenses from the Energy Department, the end result is more delay.

That’s welcome news to some manufacturers — and their allies on Capitol Hill — who have asked the Energy Department to at least temporarily stop processing export applications while studying the economic effects of sending more U.S. gas overseas.

As part of the changes announced Thursday, the Energy Department will embark on two broad studies of the economics and environmental footprint of natural gas exports.

“America shouldn’t export first and ask questions later. This new push for more analysis by the Energy Department is a welcome development,” Markey said in a written statement. “While these new studies and environmental reviews are ongoing, we should take this chance to hit the pause button on any new natural gas export approvals.”

The Energy Department intends to scrap a two-year-old approach for considering applications to export LNG to countries that don’t have free trade agreements with the United States. Instead of reviewing them in the order they were filed, as the agency largely does now, the Energy Department would first tackle those that have already cleared an expensive, time-consuming environmental assessment typically done by the Federal Energy Regulatory Commission.

“We see the change, in practice, as having the same effect as the pause in approvals . . . although perhaps without the direct negative headline,” said Benjamin Salisbury, an analyst for FBR Capital Markets & Co., in a research note to clients.

In the short term, the plan gives a boost to projects that have already filed with FERC (or even been cleared by the agency) — but were further down the Energy Department’s queue. For instance, FERC has already blessed Cheniere Energy’s plans to add liquefaction capacity to its Sabine Pass project now under construction in Louisiana — but the expansion was No. 13 in line for an export license at the Energy Department.

Not far away, the Golden Pass terminal that counts Exxon Mobil as a partner is set to gain from the change; that project has been perched at No. 9 in the Energy Department’s queue, even though it launched a pre-filing process with FERC.

Delays for some

The good news for those few appears to come with a dose of bad for more speculative projects that were hoping to get an Energy Department export license in hand before seeking customers and financing for the liquefaction terminals that cost many billions of dollars to build.

“The Department of Energy’s proposed modification does not holistically halt progress towards LNG exports, but there are some circumstances where fast-forwarding to a higher hurdle might make financing efforts more challenging,” said Kevin Book, an analyst with ClearView Energy in Washington, D.C.

The projects most clearly disadvantaged by the new approach are those whose export applications were next in line for Energy Department scrutiny — but which had not gotten far at FERC — including Excelerate Liquefaction Solutions, which planned to build a terminal in Calhoun County, Texas.

FBR’s Salisbury predicts that by essentially waiting for FERC approval before acting on export applications, the Energy Department is effectively delaying the next decision until late this year, at the earliest.

Approved gas volumes

The proposed approach does have one definitive outcome: The total volume of exports covered under Department of Energy approvals would better reflect reality.

The current process, by contrast, has given fodder to export critics by producing licenses for projects that may never materialize. Although the Energy Department had at least conditionally authorized nearly 10 billion cubic feet per day of natural gas exports to non-FTA nations, for instance, perhaps fewer than 5 billion cubic feet per day of those authorized exports would actually ever take place.

Salisbury said the total volume of authorized exports would be much more realistic as a result.

“By bypassing conditional approval, the Department of Energy avoids the political headache of approving projects unlikely to be built and preserves political capital for approving those capable of reaching the finish line,” Salisbury said.

Cove Point LNGDominion's plans to add liquefaction equipment to the decades-old Cove Point LNG receiving terminal have drawn fierce opposition from environmentalists, worried the East Coast project would be a critical outlet for Pennsylvania and Ohio Marcellus Shale production they oppose. The project's relatively small export plans -- just 770 million cubic feet per day -- could be an asset in the race to finance and build new liquefaction projects.
Location: Lusby, Md.
Company: Dominion
Expected first exports: 2017.
Customers: Japan's Kansai Electric Power Co., Tokyo Gas Co., GAIL India and Japan's Sumitomo Corp. (through its U.S. subsidiary Pacific Summit Energy)
Export license: Conditional approval Sept. 11, 2013 to export 770 million cubic feet per day.
FERC license: Second in line for review.
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Cameron LNG
Partners on the Cameron LNG project cover the range of the LNG value chain, including Japanese shipping company Nippon Yusen Kabushiki Kaisha and French electricity and gas utility GDF Suez. That broad reach could be an advantage in financing the project.
Location: Hackberry, La.
Companies: Sempra, GDF Suez, Mitsubishi Corp., Nippon Yusen Kabushiki Kaisha and Mitsui
Expected first exports: 2019.
Customers: Japan's Kansai Electric Power Co. and Japan's Toho Gas.
Export license: Conditional approval Feb. 11 to export 1.7 Bcf/day.
FERC license: Next in line for review.
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Cameron LNG
Partners on the Cameron LNG project cover the range of the LNG value chain, including Japanese shipping company Nippon Yusen Kabushiki Kaisha and French electricity and gas utility GDF Suez. ... more

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Jordan Cove Energy Project
As the first newly proposed LNG export facility on the West Coast, the Jordan Cove plant would have better access to customers in Asia. But it also has some big obstacles, including its status as the lone greenfield project – one not part of an existing import facility -- to hold a conditional LNG export license. The project also requires construction of a 230-mile pipeline. And environmental opposition in the Pacific Northwest could be significant.
Location: Coos Bay, Ore.
Company: Veresen Inc.
Expected first exports: 2019.
Customers: Company has announced non-binding agreements with prospective customers in the Asia Pacific market with negotiations expected throughout the spring and summer. (Indonesia, India and an unnamed Eastern Asia country).
Export license: Conditional approval March 24 to export 1.2 Bcf/day.
FERC license: In review, after formal application filing in May 2013. less